States examine lowering retirement age of government employees

Uttar Pradesh, Uttarakhand, Haryana and Punjab have a large number of government employees and an equally high unemployment rate. Graphic: Mint

New Delhi: A million youngsters joining the workforce every month. A lot fewer jobs being created for them. Election promises to keep. Something’s got to give. The target: government employees over the age of 50.

Several states are considering reducing the retirement age and introducing performance evaluation and compulsory retirement for older government employees to create jobs for qualified young men and women struggling to find them.

After Uttarakhand, Uttar Pradesh and Haryana, which are considering tinkering with the standard retirement age of 58, it was Punjab’s turn on Monday to join the retirement age discourse.

Chief minister Amarinder Singh’s office said his government is reviewing the previous government’s decision that allowed employees to defer retirement age from 58 years to 60. His office said the government is “mulling a policy change to fix 58 as retirement age to generate more employment opportunities for the state’s youth”. Generating jobs for youngsters was one of the campaign promises of Singh’s Congress party, which came to power in March.

According to latest labour bureau data, Punjab had an unemployment rate of 6% in 2015. It had 429,883 government employees and paid over Rs31,000 crore annually in salaries and pensions.

For several years, Punjab has not created enough jobs. According to Amit Khurana, managing director of Corporate Access, a human resource consultancy, unemployment is a political and socio-economic issue in Punjab, closely linked to widespread drug abuse in the state.

“For any state government, there are two ways to create jobs—one, add industries and two, reduce retirement age. Industry coming and creating jobs is a long process and the other can be done through executive decisions, of course with certain amount of checks and balances,” said Khurana.

He said setting the retirement age at 58 will create a certain number of jobs for the bottom of the pyramid that the government can present in its one-year report card.

While some feel a higher retirement age will mean greater efficiency thanks to experienced hands, others say that young blood can perform better than their elders, often criticized for inertia.

India faces the challenge of creating jobs for a predominantly young population.

Around 12 million people enter the workforce every year, according to government estimates. The number of jobs created is far lower; between 2011-12 and 2015-16, India created 3.65 million jobs a year, according to industry lobby group Confederation of Indian Industry.

Screening employees is as important as giving them recognition in terms of salary and positions for the performance of any establishment, added Khurana.

Earlier in July, Uttarakhand chief secretary S. Ramaswamy had asked all state departments to review the performance of officials and workers who are above 50 and to set up screening committees for the task.

Likewise, Uttar Pradesh’s Yogi Adityanath government, which came to power in March, plans to review the performance of employees over 50 and recommend compulsory retirement of those who are not performing up to par. The state chief secretary issued a notice earlier this month on this, citing rules from the state’s finance handbook. In contrast, Haryana is exploring plans to enhance the retirement age to 60 from 58 years.